Google earnings miss Street, shares drop 6%

Google delivered quarterly earnings and revenue that fell short of analysts' expectations on Wednesday, as ad pricing continued to weaken. Shares dropped sharply.

The company posted first-quarter earnings excluding items of $6.27 per share, up from $6 a share in the year-earlier period. Revenue increased by 19 percent to $15.42 billion from $12.95 billion a year ago.

Analysts had expected the company to report earnings excluding items of $6.40 a share on $15.52 billion in revenue, according to a consensus estimate from Thomson Reuters.

The number of "paid clicks'' climbed by 26 percent year-on-year in the first quarter, while the average "cost per click'' generated from the ads dropped 9 percent from a year ago.

David Paul Morris | Bloomberg | Getty Images

Google signage is displayed in front of the company's headquarters in Mountain View, Calif.

On a GAAP basis, the company earned $3.45 billion, or $5.04 per share, in the quarter, up from 3 percent from $3.3 billion, or $4.97 per share, in the year-earlier period.

As of Tuesday's close, Google's shares had gained more than 40 percent over the past 12 months.

Earlier this week, Google said it brought solar-powered drone maker Titan Aerospace for an undisclosed price, a deal that could help the tech firm deliver wireless Internet access to more of the world's population.

The move comes weeks after rival Facebook announced plans to build solar-powered drones with the capability to beam Internet access to remote locations.

The company made its wearable computer device, Google Glass, available for purchase in the U.S. for one day only on April 15. Its white frames sold out, the company said.

The Internet-search giant also got some buzz this week for a patent it filed that describes a camera-enabled contact lens. Google has recently made big moves to invest in new product categories, but some analysts say this could eventually put added pressure on the company's margins.